NEW YORK--(BUSINESS WIRE)--Feb. 3, 2015--
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported strong
financial results for fiscal third quarter 2015, ended December 31,
2014. In addition, the Company increased its financial outlook for the
fiscal year ending March 31, 2015, and provided its initial financial
outlook for the fiscal fourth quarter ending March 31, 2015.

GAAP Financial Results

For fiscal third quarter 2015, GAAP net revenue was $531.1 million, as
compared to $1.86 billion for fiscal third quarter 2014. GAAP net income
was $40.1 million, or $0.42 per diluted share, as compared to $578.4
million, or $4.69 per diluted share, for the year-ago period. GAAP net
revenue and net income declined year-over-year in fiscal third quarter
2015 because GAAP results for fiscal third quarter 2014 included net
revenue and cost of goods sold related to sell-in of the Grand Theft
Auto V® game during both fiscal second quarter and fiscal third
quarter 2014, as Grand Theft Auto Online launched during fiscal
third quarter 2014. In addition, GAAP results for fiscal third quarter
2015 reflect the deferral of net revenue and cost of goods sold related
to sell-in of Grand Theft Auto V during the quarter.

During fiscal third quarter 2015, the Company’s cash and short-term
investments balance increased to $976.6 million as of December 31, 2014.

Non-GAAP Financial Results

For fiscal third quarter 2015, Non-GAAP net revenue grew to $954.0
million, as compared to $767.7 million for the year-ago period. Non-GAAP
net income increased to $211.6 million, or $1.87 per diluted share, as
compared to $210.7 million, or $1.70 per diluted share, for the year-ago
period.

“Take-Two’s positive momentum was demonstrated once again, as we
delivered exceedingly strong third quarter revenues and profits, and
finished the quarter with nearly $1 billion in cash and short term
investments,” said Strauss Zelnick, Chairman and CEO of Take-Two. “We
successfully launched one of the most diverse holiday lineups in the
Company’s history, led by Grand Theft Auto V for PlayStation 4
and Xbox One, NBA 2K15, WWE 2K15, Borderlands: The
Pre-Sequel and Sid Meier’s Civilization: Beyond Earth. We
also generated substantial growth in digitally-delivered revenue,
including through our ongoing focus on offerings that drive recurrent
consumer spending. As a result of Take-Two’s outstanding holiday season
performance, we are raising the Company’s financial outlook for the full
year.

“Looking ahead, we expect that our fourth quarter will provide a strong
finish to fiscal 2015, which is lining up to be one of Take-Two’s best
years ever. Anchored by the eagerly-anticipated launches of Evolve and
Grand Theft Auto V for PC, along with an array of other
offerings, we will continue to deliver titles that captivate audiences
around the world and set benchmarks for excellence. With our world-class
creative teams, robust development pipeline, cutting-edge technology and
ample capital resources, Take-Two is superbly positioned to build on its
solid foundation and continue to capitalize on this dynamic
entertainment market.”

Business and Product Highlights

Since October 1, 2014:

Rockstar Games:

Launched Grand Theft Auto V and Grand Theft Auto Online
on PlayStation®4 and Xbox One. Grand Theft Auto V is the
highest-rated game to date for PlayStation 4 and Xbox One*, and has
now sold-in more than 45 million units on console, including nearly 10
million units on PlayStation 4 and Xbox One. The title is planned for
launch on PC on March 24, 2015.

Released two updates for Grand Theft Auto Online, including The
Last Team Standing Update and the Festive Surprise.

Released the portable classic Grand Theft Auto: Chinatown Wars
for Android and Amazon Kindle Fire, and updated the game for iOS. This
updated version features new highly customizable touchscreen controls,
physical controller support, plus high resolution widescreen display
on supported devices, as well as full Retina Display resolution on iOS.

Announced that Grand Theft Auto Online Heists – a four-player
co-op mode for Grand Theft Auto Online that enables players to
plan, prepare and execute multi-tiered Heists across Los Santos and
Blaine County – will be coming in early 2015 as a free update on
PlayStation 4, PlayStation 3, Xbox One, Xbox 360 and PC.

2K:

Launched NBA 2K15 on PlayStation 4, PlayStation 3, Xbox One,
Xbox 360 and PC, as well as on iOS and Amazon devices. The title is
the highest-rated sports game of 2014 across consoles and PC*, and has
continued the series’ trend of year-over-year growth with
approximately 5.5 million units sold-in to date.

Launched WWE 2K15 on the Xbox One, Xbox 360, PlayStation 4 and
PlayStation 3. Developed collaboratively by Yuke's and Visual
Concepts, WWE 2K15 is being supported with downloadable add-on
content, including a Season Pass.

Released Borderlands: The Pre-Sequel on the Xbox 360,
PlayStation 3 and PC. Co-developed by Gearbox Software and 2K
Australia, the title is being supported with downloadable add-on
content, including a Season Pass.

Launched Sid Meier’s Civilization: Beyond Earth for PC, Mac and
Linux. Developed by Firaxis Games, Sid Meier’s Civilization: Beyond
Earth is a new stand-alone, science fiction-themed entry in the
award-winning Civilization franchise, which has sold-in more
than 29 million units worldwide.

Released BioShock® Infinite: The Complete Edition for Xbox 360
and PlayStation 3, which includes the award-winning title and all of
its previously-released add-on content.

Expanded its offerings for tablets and smartphones with the releases
of Evolve: Hunters Quest, MyNBA 2K15, and NHL® 2K.

Announced that Borderlands: The Handsome Collection™ is
planned for launch on PlayStation 4 and Xbox One on March 24, 2015. The
Handsome Collection brings the critically-acclaimed Borderlands
series to next-gen consoles for the first time and offers the complete
story of the franchise’s most iconic villain, Handsome Jack. The
Handsome Collection includes Borderlands 2 and Borderlands:
The Pre-Sequel along with all of the downloadable content for both
titles – currently over $100 of value on prior-gen consoles, but now
for only $59.99 and with the graphical fidelity of next-gen consoles,
four-player split-screen on a single television, and the ability to
transfer save files to the next-gen consoles with new cross-save
functionality.**

Announced downloadable content details for Evolve™, including a Hunting
Season Pass, a fourth playable monster, Behemoth, and more.
Developed by Turtle Rock Studios and planned for global launch on Xbox
One, PlayStation 4 and PC on February 10, 2015, Evolve is the
only game in history to earn both the official Electronic
Entertainment Expo and Gamescom “Game of Show” awards in the same year.

Announced that Sid Meier’s Starships™ is planned for launch on
PC, Mac and iPad in spring 2015.Thisturn-based,
tactical space combat game will feature cross-connectivity and
unlockable bonuses with Sid Meier’s Civilization: Beyond Earth.

Announced the formation of Hangar 13, a new development studio led by
veteran game developer Haden Blackman. Hangar 13 is located at 2K’s
headquarters in the San Francisco Bay Area and is working on an
unannounced next-gen title.

* According to Metacritic.com. ** Save transfers
must be between the same console family (e.g., Xbox 360 to Xbox One).

Financial Outlook for Fiscal 2015

Take-Two is increasing its financial outlook for fiscal year 2015, which
reflects its strong fiscal third quarter results, strong current
business trends, and positive sales outlook for its upcoming releases.
In addition, the Company is providing its initial financial outlook for
its fiscal fourth quarter ending March 31, 2015 as follows:

Fourth Quarter

Fiscal Year

Ending 3/31/2015

Ending 3/31/2015

Non-GAAP net revenue

$410 to $460 Million

$1.65 to $1.70 Billion

Non-GAAP net income per diluted share (1)

$0.15 to $0.25

$1.65 to $1.75

GAAP to Non-GAAP Reconciling Items (2):

Net effect from deferral in net revenues and related cost of
goods sold

$0.21

$1.49

Stock-based compensation expense(3)

$0.14

$0.48

Non-cash amortization of discount on convertible notes

$0.04

$0.14

Non-cash tax expense

$0.00

$0.02

(Gain) on sale of long-term investment

$0.00

($0.11)

1)

For the fiscal fourth quarter ending March 31, 2015 and fiscal
year ending March 31, 2015, the Non-GAAP net income per diluted
share outlook is calculated using the “if-converted” method as a
result of the issuances of our 1.75% Convertible Notes in November
2011 and 1.00% Convertible Notes in June 2013, and Non-GAAP
diluted net income for the fourth quarter and fiscal year is
adjusted by adding-back $1.7 million and $6.8 million,
respectively, related to coupon interest and debt issuance costs,
net of tax. Shares used to calculate the Non-GAAP net income per
diluted share outlook are as follows:

Weighted average basic shares

81 Million

80 Million

Add: Weighted average participating shares

8 Million

8 Million

Add: Potential Dilution from convertible notes

26 Million

26 Million

Total weighted average diluted shares

115 Million

114 Million

2)

All GAAP to Non-GAAP reconciling items are net of tax and per
share.

3)

The Company's stock-based compensation expense for the periods
above includes the cost of approximately 1.8 million restricted
shares previously granted to ZelnickMedia that are subject to
variable accounting. Actual expense to be recorded in connection
with these shares is dependent upon several factors, including
future changes in Take-Two's stock price.

Key assumptions and dependencies underlying the Company’s financial
outlook include: the timely delivery of the titles included in this
financial outlook; continued consumer acceptance of the Xbox One and
PlayStation 4; the ability to develop and publish products that capture
market share for these next-generation systems while continuing to
leverage opportunities on the Xbox 360, PlayStation 3 and PC; and stable
foreign exchange rates. See also “Cautionary Note Regarding Forward
Looking Statements” below.

Product Releases

The following titles were released since October 1, 2014:

Label

Title

Platforms

Release Date

2K

NBA 2K15

Xbox 360, Xbox One, PS3, PS4, PC

October 7, 2014*

2K

MyNBA 2K15

Android

October 7, 2014

2K

MyNBA 2K15

iOS

October 10, 2014

2K

Borderlands: The Pre-Sequel

Xbox 360, PS3, PC, Mac, Linux

October 14, 2014*

2K

NBA 2K15

iOS, Amazon

October 16, 2014

2K

NHL 2K

iOS, Android

October 23, 2014

2K

Sid Meier’s Civilization: Beyond Earth

PC

October 24, 2014

2K

WWE 2K15

PS3, Xbox 360

October 28, 2014*

2K

BioShock Infinite: The Complete Edition

Xbox 360, PS3

November 4, 2014

2K

Borderlands: The Pre-Sequel - Handsome Jack Doppelganger Pack
(DLC)

Xbox 360, PS3, PC

November 11, 2014

Rockstar Games

Grand Theft Auto V

Xbox One, PS4

November 18, 2014

2K

WWE 2K15

Xbox One, PS4

November 18, 2014*

2K

WWE 2K15: Accelerator (DLC)

Xbox 360, Xbox One, PS3, PS4

November 18, 2014

2K

Sid Meier’s Civilization: Beyond Earth

Mac

November 26, 2014

2K

Borderlands: The Pre-Sequel – Holodome Onslaught Pack (DLC)

Xbox 360, PS3, PC

December 16, 2014

2K

WWE 2K15: WCW Pack (DLC)

Xbox 360, Xbox One, PS3, PS4

December 16, 2014

2K

Sid Meier’s Civilization: Beyond Earth

Linux

December 18, 2014

Rockstar Games

Grand Theft Auto: Chinatown Wars

Android, Amazon

December 18, 2014

2K

WWE 2K15: New Moves Pack (DLC)

Xbox 360, Xbox One, PS3, PS4

January 13, 2015

2K

Borderlands: The Pre-Sequel – Lady Hammerlock Pack (DLC)

Xbox 360, PS3, PC

January 27, 2015

2K

Evolve: Hunters Quest

iOS, Amazon, Windows Phone, Android

January 29, 2015

2K

WWE 2K15: 2K Showcase: One More Match (DLC)

Xbox 360, Xbox One, PS3, PS4

February 3, 2015

*North American release date; international release date
followed three days after.

Take-Two's lineup of future titles announced to date includes:

Label

Title

Platforms

Release Date

2K

Evolve

Xbox One, PS4, PC

February 10, 2015

2K

WWE 2K15: 2K Showcase: Hall of Pain (DLC)

Xbox 360, Xbox One, PS3, PS4

February 17, 2015

Rockstar Games

Grand Theft Auto V

PC

March 24, 2015

2K

Borderlands: The Handsome Collection

Xbox One, PS4

March 24, 2015*

2K

Sid Meier’s Starships

PC, Mac, iPad

Spring 2015

2K

Battleborn

PS4, Xbox One, PC

Fiscal Year 2016

*North American release date; international release date
typically follows three days after.

Conference Call

Take-Two will host a conference call today at 4:30 p.m. Eastern Time to
review these results and discuss other topics. The call can be accessed
by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast
of the call will be available by visiting http://ir.take2games.com
and a replay will be available following the call at the same location.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses
Non-GAAP measures of financial performance. The Company believes that
these Non-GAAP financial measures, when taken into consideration with
the corresponding GAAP financial measures, are important in gaining an
understanding of the Company’s ongoing business. These Non-GAAP
financial measures also provide for comparative results from period to
period. Therefore, the Company believes it is appropriate to exclude the
following Non-GAAP items, net of applicable taxes, as discussed below:

Net effect from deferral in net revenues and related cost of goods
sold - the Company defers revenue and related costs from the sale
of certain titles that have undelivered elements upon the sale of the
game and recognizes that revenue upon the delivery of the undelivered
elements. The Company also defers revenue and related costs for
certain sales generated from certain titles for which we have or
expect to provide certain additional add-on content. These amounts are
deferred over the estimated remaining life of the game to which they
pertain. As there is no impact to the Company’s operating cash flow,
management excludes the impact of deferred net revenue and related
costs from its Non-GAAP financial measures when evaluating the
Company's operating performance, when planning, forecasting and
analyzing future periods, and when assessing the performance of its
management team. In addition, we believe that these Non-GAAP financial
measures provide a more timely indication of trends in our business,
provide comparability with the way our business is measured by
analysts, and provide consistency with industry data sources.

Stock-based compensation – the Company does not consider
stock-based compensation charges when evaluating business performance
and management does not contemplate stock-based compensation expense
in its short- and long-term operating plans. As a result, the Company
has excluded such expenses from its Non-GAAP financial measures.

Business reorganization, restructuring and related expenses –
although the Company has incurred business reorganization expenses in
the past, each charge relates to a discrete event based on a unique
set of business objectives. Management does not believe these charges
reflect the Company's primary business, ongoing operating results or
future outlook. As such, the Company believes it is appropriate to
exclude these expenses and related charges from its Non- GAAP
financial measures.

Non-cash amortization of discount on convertible notes – the
Company records non-cash amortization of discount on convertible notes
as interest expense in addition to the interest expense already
recorded for coupon payments. The Company excludes the non-cash
portion of the interest expense from its Non-GAAP financial measures
because these amounts are unrelated to its ongoing business operations.

Gain on convertible note hedge and warrants, net – the Company
entered into unwind agreements with respect to its convertible note
hedge and warrant transactions. As a result of the unwind agreements,
these transactions were accounted for as derivatives whereby gains and
losses resulting from changes in the fair value were reported as a
gain on convertible note hedge and warrants, net. The Company excludes
the impact of such transactions when evaluating the Company’s
operating performance. Management does not believe these gains and
losses reflect the Company's primary business, ongoing operating
results or future outlook. As such, the Company believes it is
appropriate to exclude these gains and losses from its Non-GAAP
financial measures.

Non-cash tax expense for the impact of deferred tax liabilities
associated with tax deductible amortization of goodwill – due to
the nature of the adjustment as well as the expectation that it will
not have any cash impact in the foreseeable future, the Company
believes it is appropriate to exclude this expense from its Non-GAAP
financial measures.

Gain (loss) on sale of long-term investments – from time to
time, the Company makes strategic investments. The Company excludes
the impact of any gains and losses on such investments from its
Non-GAAP financial measures.

Discontinued operations – the Company does not engage in sales
of subsidiaries on a regular basis and therefore believes it is
appropriate to exclude such gains (losses) from its Non-GAAP financial
measures. As the Company is no longer active in its discontinued
operations, it believes it is appropriate to exclude income (losses)
thereon from its Non-GAAP financial measures.

These Non-GAAP financial measures are not intended to be considered in
isolation from, as a substitute for, or superior to, GAAP results. These
Non-GAAP financial measures may be different from similarly titled
measures used by other companies.

Final Results

The financial results discussed herein are presented on a preliminary
basis; final data will be included in Take-Two’s Quarterly Report on
Form 10−Q for the period ended December 31, 2014.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a
leading developer, publisher and marketer of interactive entertainment
for consumers around the globe. The Company develops and publishes
products through its two wholly-owned labels Rockstar Games and 2K. Our
products are designed for console systems and personal computers,
including smartphones and tablets, and are delivered through physical
retail, digital download, online platforms and cloud streaming services.
The Company’s common stock is publicly traded on NASDAQ under the symbol
TTWO. For more corporate and product information please visit our
website at http://www.take2games.com.

All trademarks and copyrights contained herein are the property of their
respective holders.

Cautionary Note Regarding Forward-Looking
Statements

The statements contained herein which are not historical facts are
considered forward-looking statements under federal securities laws and
may be identified by words such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "potential," "predicts,"
"projects," "seeks," "will," or words of similar meaning and include,
but are not limited to, statements regarding the outlook for the
Company's future business and financial performance. Such
forward-looking statements are based on the current beliefs of our
management as well as assumptions made by and information currently
available to them, which are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict. Actual
outcomes and results may vary materially from these forward-looking
statements based on a variety of risks and uncertainties including: our
dependence on key management and product development personnel, our
dependence on our Grand Theft Auto products and our ability to develop
other hit titles for current and next-generation platforms, the timely
release and significant market acceptance of our games, the ability to
maintain acceptable pricing levels on our games, our ability to raise
capital if needed and risks associated with international operations.
Other important factors and information are contained in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2014,
including the risks summarized in the section entitled "Risk Factors,"
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2014, and the Company's other periodic filings with the
SEC, which can be accessed at www.take2games.com.
All forward-looking statements are qualified by these cautionary
statements and apply only as of the date they are made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise.

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share amounts)

Three months ended December 31,

Nine months ended December 31,

2014

2013

2014

2013

Net revenue

$

531,147

$

1,863,869

$

782,849

$

2,155,360

Cost of goods sold:

Product costs

102,068

374,710

139,421

438,839

Software development costs and royalties

108,214

200,333

144,863

305,151

Internal royalties

14,099

502,169

34,810

510,371

Licenses

53,632

42,522

65,091

51,678

Total cost of goods sold

278,013

1,119,734

384,185

1,306,039

Gross profit

253,134

744,135

398,664

849,321

Selling and marketing

96,892

70,476

182,874

213,419

General and administrative

53,564

34,718

136,891

110,601

Research and development

31,221

29,233

79,886

76,624

Depreciation and amortization

5,845

3,413

15,123

9,837

Total operating expenses

187,522

137,840

414,774

410,481

Income (loss) from operations

65,612

606,295

(16,110

)

438,840

Interest and other, net

(9,458

)

(5,949

)

(24,689

)

(26,018

)

Gain (loss) on long-term investment

(1,500

)

-

17,476

-

Loss on extinguishment of debt

-

-

-

(9,014

)

Gain on convertible note hedge and warrants, net

-

-

-

3,461

Income (loss) from continuing operations before income taxes

54,654

600,346

(23,323

)

407,269

Provision for income taxes

14,561

21,902

13,356

14,804

Income (loss) from continuing operations

40,093

578,444

(36,679

)

392,465

Loss from discontinued operations, net of taxes

-

(18

)

-

(73

)

Net income (loss)

$

40,093

$

578,426

$

(36,679

)

$

392,392

Earnings (loss) per share:

Continuing operations

$

0.46

$

5.88

$

(0.46

)

$

4.02

Discontinued operations

-

-

-

-

Basic earnings (loss) per share

$

0.46

$

5.88

$

(0.46

)

$

4.02

Continuing operations

$

0.42

$

4.69

$

(0.46

)

$

3.29

Discontinued operations

-

-

-

-

Diluted earnings (loss) per share

$

0.42

$

4.69

$

(0.46

)

$

3.29

Weighted average shares outstanding:

Basic

87,483

98,290

80,128

97,529

Diluted

113,938

125,042

80,128

127,833

Computation of Basic EPS:

Net income (loss)

$

40,093

$

578,426

$

(36,679

)

$

392,392

Less: net income allocated to participating securities

(3,127

)

(77,857

)

$

-

(42,482

)

Net income (loss) for basic EPS calculation

$

36,966

$

500,569

$

(36,679

)

$

349,910

Weighted average shares outstanding - basic

87,483

98,290

$

80,128

97,529

Less: weighted average participating shares outstanding

(6,824

)

(13,230

)

-

(10,559

)

Weighted average common shares outstanding - basic

80,659

85,060

$

80,128

86,970

Basic EPS

$

0.46

$

5.88

$

(0.46

)

$

4.02

Computation of Diluted EPS:

Net income (loss)

$

40,093

$

578,426

$

(36,679

)

$

392,392

Less: net income allocated to participating securities

(2,401

)

(61,200

)

-

(32,412

)

Add: interest expense, net of tax, on Convertible Notes

7,199

7,418

-

26,221

Net income (loss) for diluted EPS calculation

$

44,891

$

524,644

$

(36,679

)

$

386,201

Weighted average shares outstanding - basic

80,659

85,060

80,128

86,970

Add: dilutive effect of common stock equivalents

26,455

26,752

-

30,304

Weighted average common shares outstanding - diluted

107,114

111,812

80,128

117,274

Diluted EPS

$

0.42

$

4.69

$

(0.46

)

$

3.29

Three months ended December 31,

Nine months ended December 31,

OTHER INFORMATION

2014

2013

2014

2013

Geographic revenue mix

United States

63

%

44

%

59

%

46

%

International

37

%

56

%

41

%

54

%

Platform revenue mix

Console

83

%

97

%

79

%

93

%

PC and other

17

%

3

%

21

%

7

%

Net revenue by distribution channel:

Physical retail and other

72

%

93

%

60

%

87

%

Digital online

28

%

7

%

40

%

13

%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

December 31,

March 31,

2014

2014

ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$

897,452

$

935,400

Short-term investments

79,140

-

Restricted cash

31,301

193,839

Accounts receivable, net of allowances of $86,630 and $75,518 at
December 31, 2014 and